One of questions that we are often asked by many clients is whether it makes sense to purchase the rental car coverage alongside the emergency road side that is offered when purchasing a policy with comprehensive and collision coverage. 95% of the time, we advise yes. The 5% of the time we say "No" is in the event that they have an extra car in their household that they are able to use in the event of an accident. There is nothing worse than being involved in an accident with your vehicle being out of service while it is being repaired and you are footing the bill for 2 to 3 weeks or more.
Rental reimbursement cost varies from place to place and has different variables that determine its cost. Another important aspect is the insurance companies have agreements with rental car companies that individuals do not have so they are able to get vehicles reserved for clients when a rental company might tell an individual that they do not have inventory.
Here are a few questions to use to help you determine whether you need rental reimbursement?
Q: If my vehicle was involved in an accident tomorrow, do I have another vehicle that I can use until I am able to get my vehicle back?
YES - You can forgo the rental car coverage
NO - You may want to purchase the rental car coverage
Q: Do I use my vehicle for work? Would I be able to earn money if I did not have my vehicle?
YES - You may want to purchase rental car coverage because you would need a vehicle almost immediately to continue your standard of living
NO - You may be able to forgo the rental car coverage
Q: Do I have $900 to $1500 reserved that I can use for a rental vehicle?
YES - You may be able to forgo the rental car coverage if you are ok for using those funds to pay for a rental car
NO - You will want to purchase the rental car coverage. Your only cost when getting the rental car would be the deposit which is $50 to $100 depending on the company.
Another variable to consider is that rental reimbursement often only cost and additional $3 to $10 per month and allows you to get more depending on the policy. Some of the typical limits for a personal auto policy are $30, $40, $50 or more while commercial auto policies sometimes have much larger amounts upwards of $100 per day.
Rental reimbursement is only one aspect of the scenario when contouring your auto coverage and the company that you write your coverage with is more important than any other aspect. With that being said, at Customized Insurance Brokers, we make sure that the companies that we are partnered with are A or better rated and will take care of our clients when they need them the most.
